The Age of Austerity

The Age of Austerity

The Global Financial Crisis and the Return to Economic Growth

Thomas J. Schoenbaum

The book begins with a detailed breakdown of the financial crisis and the government response in the United States, with particular focus on the Dodd-Frank Wall Street Reform and Consumer Protection Act. The author then puts forth a basic three-part plan calling for (1) fundamental tax and entitlement reform; (2) massive economic stimulus in the form of public and private investment to modernize the country’s aging infrastructures; and (3) mortgage relief to revitalize the nation’s housing markets. The book concludes with specific policy proposals designed to achieve these goals and return the US economy to a state of full employment and robust economic growth.

Chapter 1: An historic turning point

Thomas J. Schoenbaum

Subjects: economics and finance, economic psychology, financial economics and regulation, law - academic, regulation and governance, politics and public policy, public policy

Extract

“Let’s take away President Obama’s blank check.” A lovely female voice intones this solution for America’s economic malaise in a television political ad, “Wake Up,” produced by Republican strategist Karl Rove’s Crossroads GPS SuperPAC (Political Action Committee). “Sometimes it’s hard to sleep,” begins the ad, and we see a beautiful young woman in a white lace nightie in bed next to a clock that reads 3:01 a.m. We notice her shapely legs as she climbs out of bed to go to the bathroom. On the way, she tells us that she is worried that “our national debt could break this country.” She goes into the specifics: a lot of people are out of work, the values of homes are falling, the futures of our kids are in jeopardy, the price of health care is going up, and Social Security and Medicare will not be there in the future when we need them. “Things are going from bad to worse.”

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